U.S. v. Ionia Management S.A., 3:07cr134(JBA).

526 F.Supp.2d 319

UNITED STATES of America v. IONIA MANAGEMENT S.A., et al.

No. 3:07cr134(JBA).

United States District Court, D. Connecticut.

December 12, 2007.

COPYRIGHT MATERIAL OMITTED

George M. Chalos, Chalos, O'Connor & Duffy, LLP, Port Washington, NY, Patrick F. Lennon, Lennon Murphy & Lennon, Southport, CT, for Ionia Management S.A., et al.

Anthony E. Kaplan, John H. Durham, William M. Brown, Jr., U.S. Attorney's Office, New Haven, CT, for United States of America.

RULING ON DEFENDANT IONIA'S POST-TRIAL MOTIONS

JANET BOND ARTERTON, District Judge.

On September 6, 2007, at the conclusion of a jury trial, Defendant Ionia Management S.A. ("Ionia") was convicted on eighteen counts: thirteen counts of violating the Act to Prevent Pollution from Ships ("APPS") and associated regulations, 33 U.S.C. § 1908(a); three counts of falsifying records in connection with a federal investigation in violation of 18 U.S.C. § 1519; one count of obstructing justice in violation of 18 U.S.C. § 1505; and one count of conspiring to commit these offenses in violation of 18 U.S.C. § 371. These charges were the product of four initially separate indictments returned in the District of Connecticut, the Southern District of Florida, the Eastern District of New York, and the District Court of the Virgin Islands. The latter three were transferred to this district to be consolidated with the Connecticut indictment. Following the guilty verdict, Ionia filed two motions which are now the subject of this ruling: Motion for a Judgment of Acquittal, or in the Alternative, a New Trial [Doc. # 176]; and Motion for a Judicial Interview of Juror # 2 to Investigate Potential Juror Bias [Doc. # 186]. For the reasons detailed below, the relief Ionia seeks is denied; a general familiarity with the facts of the case is presumed.¹

I. Motion for Judgment of Acquittal or a New Trial

A. Standards

A judgment of acquittal pursuant to Rule 29 is proper "only if, after viewing the evidence in the light most favorable to the prosecution and drawing all reasonable inferences in the government's favor, [the Court] concludes no rational trier of fact could have found the defendant guilty beyond a reasonable doubt." United States v. Reyes, 302 F.3d 48, 52 (2d Cir.2002). Taking care to "avoid usurping the role of the jury," "the Court must determine whether upon the evidence, giving full play to the right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of fact, a reasonable mind might fairly conclude guilt beyond a reasonable doubt." United States v. Guadagna, 183 F.3d 122, 130 (2d Cir.1999) (quotation marks omitted).

Rule 33, which permits the Court to "vacate any judgment and grant a new trial if the interest of justice so requires," allows "broad discretion . . . to set aside a jury verdict and order a new trial to avert a perceived miscarriage of justice," United States v. Sanchez, 969 F.2d 1409, 1413 (2d Cir.1992). In making this assessment, the Court "must strike a balance between weighing the evidence and credibility of witnesses and not wholly usurping the role of the jury." United States v. Ferguson, 246 F.3d 129, 133 (2d Cir.2001) (quotation marks omitted). The Second Circuit explains that, when faced with such a motion,

the judge must examine the totality of the case. All the facts and circumstances must be taken into account. An objective evaluation is required. There must be a real concern that an innocent person may have been convicted. It is only when it appears that an injustice has been done that there is a need for a new trial "in the interest of justice."

Sanchez, 969 F.2d at 1414 (footnote omitted and emphasis added).

B. Vicarious criminal liability

Ionia argues that the guilty verdict should be set aside because the jury failed to apply proper principles of agency: "the government failed to introduce sufficient evidence to establish that Ionia could be held vicariously liable for the acts of its employees and agents." (Def.'s Mot. J. Acquittal at 4.) Specifically, Ionia relies on the testimony of four members of the M/T Kriton's crew "that Ionia had a strict policy against the improper discharge of oily waste and bilge water, and they were each trained and promised to abide by this policy. Thus, any illegal activities undertaken by these crewmembers were not within the scope of their employment or for the actual benefit of Ionia." (Id. at 4-5). In addition, Defendant contends that the Government failed to prove that the crew's illegal conduct provided any actual benefit to Ionia. (Id. at 7.) The Government, disputing Ionia's conception of agency, responds that the evidence was sufficient to impose vicarious criminal liability on Ionia. (Gov't's Opp. J. Acquittal [Doc. # 188] at 17.)

1. Legal principles

The issue of how to properly define corporate criminal liability was the subject of much discussion by the parties in preparation for and during the trial, The Government's proposed jury instructions included language substantially the same as the Court's final charge to the jury (which is quoted in relevant part below). In comparison, Ionia argued that there could be no vicarious liability if the corporation had neither specifically authorized its agents to commit the criminal acts nor reaped an actual benefit as a result of the agents' conduct.

In the Second Circuit, "[i]t is settled law that a corporation may be held criminally responsible for [criminal] violations committed by its employees or agents acting within the scope of their authority." United States v. Twentieth Century Fox Film Corp., 882 F.2d 656, 660 (2d Cir.1989). In an earlier, classic formulation, the court explained:

The corporate defendant makes a separate contention that the guilt of its salesman is not to be attributed to it. But the Supreme Court has long ago determined that the corporation may be held criminally liable for the acts of an agent within the scope of his employment, New York Cent & H.R.R. Co. v. United States, 212 U.S. 481, 29 S.Ct. 304, 53 L.Ed. 613, and the state and lower federal courts have been consistent in their application of that doctrine.

United States v. George F. Fish, Inc., 154 F.2d 798, 801 (2d Cir.1946). Whether an agent is acting within the scope of his employment can then be measured by whether he or she is acting with authority and with an intent to benefit the employer. United States v. Koppers, Inc., 652 F.2d 290, 298 (2d Cir.1981) (approving jury instruction that "a corporation could be held criminally liable for the acts of its managerial agents done on behalf of and to the benefit of the corporation and directly related to the performance of the duties the employee has authority to perform").

An agent need not have conferred an actual benefit, however; it is sufficient that there was an intent, at least in part, to benefit the employer. J.C.B. Super Markets, Inc. v. United States, 530 F.2d 1119, 1122 (2d Cir.1976) (concluding that the defendant "was clearly acting within the scope of her authority, receiving food stamps for the benefit of her employer"). The panel in J.C.B. Super Markets addressed the flaw in Ionia's position that there must be an actual benefit, rejecting the argument that "the respondeat superior principle is not applicable where the agent is advancing his own rather than the corporation's interest." 530 F.2d at 1122. To this the court responded:

The suggestion that the employee's wrongful act did not advance the interests of the employer and therefore should not be imputed to it entirely overlooks the basic concept of respondeat superior. Presumably no tortious act by an agent redounds to the benefit of the principal where the latter is held responsible for the damage which results. Yet if this reasoning were followed no principal would ever be liable.

Id. Clarifying the relationship between authority and illegality, the court continued; "[i]f the fact that [the defendants here] were not authorized to make illegal sales would exculpate the employer, it would be practically impossible to impose any penalties." Id.

The cases relied on by Ionia offer no additional support for its misconception about the "benefit" element. In United States v. Demauro, 581 F.2d 50, 54 n. 3 (2d Cir.1978), the Second Circuit reaffirmed the general rule that "a corporation is liable for the criminal acts of its employees if done on its behalf and within the scope of the employees' authority." The First Circuit in United States v. Cincotta explained that

criminal liability may be imposed on the corporation only where the agent is acting within the scope of employment. That, in turn, requires that the agent be performing acts of the kind which he is authorized to perform, and those acts must be motivated—at least in part—by an intent to benefit the corporation.

689 F.2d 238, 241-42 (1st Cir.1982). And in United States v. Beusch, the Ninth Circuit approved a jury instruction which read, in part:

The acts of a corporate agent or corporation's employee are within the scope of his authority if those acts are done on the corporation's behalf or for its benefit in the performance of the agent's general duties. . . . In order to be acting within the scope of his authority, the employee must be found to be acting on behalf of the corporation with the purpose of benefitting the corporation or serving some corporate purpose.

596 F.2d 871, 877 (9th Cir.1979). In their varying formulations, these three cases confirm the view that scope of employment is the operative element, with corporate purpose, authority, and/or benefit providing context for that term.

As to the relationship between an employer's official policies, informal instructions, illegal conduct, and the imputation of vicarious liability, Judge Sand has offered a useful instruction:

If you find that the agent was acting within the scope of his employment, the fact that the agent's act was illegal, contrary to his...